/biz/ - Business & Finance

>>24330705
Medium of exchange is fundamental to human civilization. It starts with small tribes that are able to pool resources, goes to using things like shells as currency, to gold, and then to fiat.

Currency can not be overstated in terms of its effect on human civilization. Without a medium of exchange you can't get past the tribal states of life. It's the system that is the building block of modern life.

As it exists currently, money is fiat - which is money that is enforced by the government. Fiat is the latin word which roughly translates to "let it be done". It isn't backed by anything other than the government telling you it's being backed by the government. We actually live in the exception, not the rule. For most of human history currency was backed by something - gold. It's only within the last 50 years that we've moved to this fiat system.

Modern monetary theory is Keynesian. It is based on the assumption that people need to constantly be spending for the economy to grow. This means that currency needs to constantly be devalued (via inflation) in order that people spend it. True inflation is 7% historically and explains why prices go up over the years. This is why no prudent wealth manager has ever said "let's invest in cash". 20% of all USD ever to exist has just been printed within the last year. We are looking at 15%+ inflation with many experts giving higher eventual numbers. On top of all of this, we haven't solved anything. We are only putting a band-aid on the problem. All of the most distinguished hedge fund managers, from Druckenmiller to Dalio have been saying this. There is no one more educated on a subject than those who are able to take advantage of that subject.

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